Skill Shortages and Salary Pressure: What Malaysian Employers Must Do to Stay Competitive in 2025

Skill Shortages and Salary Pressure: What Malaysian Employers Must Do to Stay Competitive in 2025

The Malaysian job market is heating up, and not just in terms of opportunity. As companies across the country face rising skill shortages and aggressive salary expectations, staying competitive has become more than a strategy. It is now a necessity.

Recent findings reveal that 64 percent of Malaysian companies are experiencing moderate to extreme skill shortages, especially at intermediate to management levels. At the same time, over 56 percent of professionals plan to switch jobs in 2025 in search of better pay and benefits. For companies in Kuala Lumpur and Bangsar South, this means navigating a highly competitive and fast-changing recruitment landscape.

This article explores:

  • Why the skills gap is expanding

  • How salary-driven job changes are affecting recruitment

  • What your company can do to stay ahead

  • Why partnering with a recruitment agency like Eternity Recruitment can provide a critical advantage

Why Malaysia’s Skills Gap Is Widening

The post-pandemic era accelerated digital transformation across industries. However, this also revealed a core issue. Malaysia’s talent pool has not kept pace with business needs. Today’s employers demand candidates with technical expertise, leadership skills, and the ability to adapt quickly.

Key Areas with Limited Talent:

  • Digital and IT roles such as cybersecurity, artificial intelligence, and data analytics

  • Mid-level managers with experience in driving transformation

  • Sales professionals who understand value-based selling

  • Customer service leads skilled in digital-first communication

Hiring companies in KL are realizing that finding job seekers with the right mix of skills and immediate impact is more difficult than ever.

Salary Pressure Is Rising Rapidly

In 2025, candidates hold the upper hand. With greater transparency around salary expectations and career mobility, they are no longer willing to settle. Job seekers today are well informed and confident about asking for better compensation.

Current Salary Trends:

  • Professionals switching jobs are seeking 15 to 30 percent increases

  • Candidates assess total compensation including bonuses, health coverage, and hybrid work policies

  • Counteroffers are becoming a regular part of negotiations

For employers, failing to offer market-aligned packages leads to missed opportunities and extended vacancies.

Turnover Has Become a Costly Problem

Attracting talent is only part of the challenge. Retaining them is equally essential. With more than half of Malaysian professionals intending to move jobs, businesses must prepare for the hidden costs of turnover.

Replacing an employee can cost up to 50 to 60 percent of their annual salary. This includes lost productivity, recruitment expenses, onboarding time, and retraining.

Reasons Employees Are Leaving:

  • Stagnant pay growth

  • Lack of career progression

  • Poor workplace culture or leadership

  • Better offers from competing employers

Employers must shift from reactive hiring to proactive engagement and long-term workforce planning.

Five Ways Employers Can Compete

To address talent shortages and rising expectations, employers must rethink their hiring approach.

1. Use Skills-Based Hiring

Prioritize candidates based on their ability to perform the role rather than solely focusing on qualifications or years of experience. Skills-based hiring unlocks access to a more diverse and capable talent pool.

2. Provide Competitive Compensation

Salary remains a major factor, but job seekers also care about the full benefits package. Consider offering:

  • Remote or hybrid work options

  • Performance-based incentives

  • Training budgets or certification programs

  • Mental health and wellness support

Communicate the total value of your offer clearly.

3. Speed Up Your Hiring Timeline

Top candidates do not wait. The average hiring decision must now be made within 10 to 14 days. Delays lead to drop-offs and lost talent. Streamline your process and act decisively.

4. Upskill Your Current Workforce

Reduce your hiring dependency by growing internal capabilities. Offer staff opportunities to learn new tools, gain certifications, and take on leadership roles.

5. Partner with a Professional Recruitment Agency

Working with a recruitment agency like Eternity Recruitment provides access to curated candidates, market intelligence, and faster time to hire. This support is especially valuable for businesses located in talent-competitive areas like Bangsar South and central Kuala Lumpur.

KL and Bangsar South: Malaysia’s Talent Hotspots

Both Kuala Lumpur and Bangsar South are now hubs for digital companies, fintech startups, and service centers. These businesses are growing fast, but the demand for skilled professionals far outweighs supply.

If you are a hiring company in KL or looking for a hiring service in Bangsar South, it is essential to partner with a recruitment agency that understands local dynamics.

Why Eternity Recruitment is the Right Partner

At Eternity Recruitment, we specialize in helping companies find the right people in roles such as IT, Sales, and Customer Service. We understand what makes a candidate a good fit, not just on paper but in performance, culture, and mindset.

Our Promise:

  • Shortlisted candidates tailored to your needs

  • Real-time salary benchmarking for accurate offers

  • In-depth screening to save you time and cost

  • Insight into employer branding that attracts top talent

  • Fast and efficient recruitment delivery

We are proud to be a trusted recruitment agency in Kuala Lumpur and offer a dedicated hiring service for businesses in Bangsar South.

Final Thoughts

The landscape of recruitment in Malaysia is changing. Skills shortages and rising salary expectations are reshaping how businesses must approach hiring. Whether you are scaling a startup or expanding a team, you need a forward-thinking recruitment strategy.

That includes competitive offers, a streamlined hiring process, and the right recruitment partner.

Let Eternity Recruitment Help You Hire Better

Eternity Recruitment is your go-to recruitment agency for finding high-performing candidates in a competitive market. With experience across multiple sectors and a deep understanding of local hiring trends, we are here to help you make smart hiring decisions.

📩 Discover why businesses trust Eternity Recruitment as their preferred hiring company in KL and top recruitment service provider in Bangsar South.

Contact Us Directly

Eternity Recruitment
Email: info@eternity-recruitment.com
Phone Number: +603 3005 7814 / +6016 418 1648
Address: Unit 3A-01 Level 3A,
Wisma N2N, Tower 2, Avenue 3,
No 8, Jalan Kerinchi,
Bangsar South, 59200 Kuala Lumpur
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